How good are your business controls?
15 May 2018
You may be under a statutory obligation for your financial statements to be audited or need an audit for investor or other stakeholder reasons. But for privately owned businesses, there can be a perception that it is a routine technical process that may not always provide the level of useful information that you need to help drive your business forward.
Beyond the numbers
A major part of our audit approach is to take the time needed to properly understand you and your business: we believe that delivering a robust, high-quality and transparent audit means assessing the strength of your systems that provide the key numbers.
We understand the importance of your control environment and so recognise that you are also likely to be interested in more than simply whether or not the financial statements are prepared in accordance with financial reporting standards. We have developed our own proprietary tool to assess and report on business’ risks and control environments - BDO RADAR.
BDO RADAR helps us to analyse and visually report on your internal controls for 14 key themes across your business giving you a snapshot of how well you are controlling the business. We also benchmark performance against our assessment of the strength of your control environment for the prior year to show the direction of travel.
How this works as part of your audit
During the course of the audit we assess the risk and control environments of your business with reference to these themes (including operational effectiveness of finance function, tax considerations and similar) using a standardised model. Any assessment does, of course, include an element of judgement, but it also includes a significant element of science and experience and should at the very least provoke some valuable challenges and conversations.
For each overarching risk or control theme, an overall rating is provided; this represents an average of several contributory areas. A graphic is provided for each contributory area. This is based on an assessment using our proprietary model which has been prepared specifically for privately owned businesses. The scoring ranges from red, where potential deficiencies in controls have been identified, through to green which represents best in class.
BDO RADAR allows us to provide valuable annual feedback on key control systems in your business - enabling the board to address areas where, in our opinion, there is an opportunity to enhance your controls and limit risks.
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